Class A motorhome manufacturer Rexhall Industries Inc. reports it lost $2.4 million and its sales revenue fell 39% in 2003 because mass production of its T-Rex Double & Wide motorhome was delayed and because “management now believes it may have inadvertently given the impression that it would discontinue production of its standard-line products during the latter half of 2003,” the company stated in a Securities and Exchange Commission (SEC) filed today (April 14).
However, the Lancaster, Calif. company said in the document that it is continuing to build its standard-line gas and diesel engine Class A’s and that “these “new & improved” motorhomes are now available.”
Rexhall, also said in the document: “Management is working to re-establish the company as a quality motorhome manufacturer to its existing dealer network and the industry as a whole.”
Rexhall’s net loss of $2.4 million in 2003 compares with a net loss of $935,000 in 2002.
The company also reported a $2 million net loss in 2001, although it posted net profits of $2.3 million in 2000 and $5.3 million in 1999.
Largely as a result of the confusion over the T-Rex, Rexhall’s total sales revenue plunged 39% in 2003 to $38.9 million, compared with $63.3 million in 2002.
In terms of units, Rexhall shipped 448 gas and diesel Class A’s in 2003, compared with 763 in 2002, a decline of 41%. Wholesale shipments of its gas-engine models in 2003 declined 30% and its diesel models fell 67% when compared with 2002.
According to a company statement, as a result of the miscommunication, “Many dealers maintained lower than usual stocking levels of the company’s standard-line product to make room for the new T-Rex Double & Wide,” which was unveiled in July. But mass production of the T-Rex “was delayed through the end of the year,” the company reported.
Rexhall also revealed in the SEC document that it will no longer do business with its largest dealer, La Mesa RV, the San Diego-based multilocation dealership company. La Mesa accounted for 22% of Rexhall’s sales in 2002.
But Rexhall stopped selling to La Mesa “because the dealer would no longer purchase the company’s motorhomes without seeking substantial discounts or rebates which, in management’s view, precluded profitable sales to this dealer.”